Hi guys, every month we tell you not to trade NFP (US jobs) on a Friday, and I still get emails from folks wondering why. Last week was a classic example. During the London morning session, the price on most pairs, like the Euro/$ below were drifting lower.
The expectation was that it would be yet more positive US data. Then the news was released and BANG it was much worse than expected and the $ weakened quickly and dramatically.
This is known as “selling the rumour & buying the news.”
You may think you would have caught the up move but in reality, the price moves so quickly that you can not compete with the banks and big institutions. Even if your order was filled the spreads usually widen and often there is slippage so your order may be filled 20 pips worse than expected.
The final issue is that as you dive in, the price suddenly retraces (often sharply) and you are taken out at a loss. It’s a mug’s game and you should leave it alone!
This is a 15 minute chart of the €/$ from Friday:
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The Forex Week Ahead
In view of the bad US jobs figures, analysts will be watching all upcoming $ news very closely. It may be that this was a freak report, BUT the previous month’s figures were reduced by a significant amount too. If, despite all the pumping of yet more fiat banknotes into the US economy, their situation does not improve then this could be a dangerous sign for all economies as there is little option left to central bankers.
This is why I am such a big believer in the future of cryptocurrencies as per Fridays blog post. I buy and hold as well as trade and FMP member John kindly shared his recent performance results with us. John has been a member here since 2013.
He has a full time job and therefore has limited screentime and by this own admission, his results would have been better if he had spent more time on his trades. He made just over $2150 in just 7 weeks with $2500 invested. He trades crypto with a mixture of fundamental analysis + my M2 for entries and trade management. Check out his post here:
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There is a lot less news this week, although there are quite a few speeches by central bankers, so tiptoe around those too. They shouldn’t be controversial, but you never know, just occasionally they may say something that can rock the markets.
The big question now is are we going to see continued $ weakness Only be in one $ trade at a time until we find out.
Swing trades? There are quite a few good setups. Its not my type of trading but I show in the video how to do it.
Make sure to check into the forum there were some great trade setups shared there last week. Also member Rune from Australia explained why he is bullish on the Aud. He shares his local knowledge to help make trading decisions. You should too.
€uro/$: $1.2000 is a huge area. However it may not get there, if so watch 1.2100 intraday but there is not a great place for a stop, but if you are trading smaller timeframes look for clues there.
Chf: Worked last week again shorting but I missed the entry 🙁 this week looking to short at 0.9150
Euro/Gbp: Same as last week: No idea technically nor fundamentally! leaving for now
Gbp/$: Messy, …1.3710 is a better area, but again may not get there so I will watch around 1.3930 intraday to long.
$/Yen: 108.30 is a key area to consider a long.
Cad: Possible swing trade backup from 1.2060/2100 area. Its a BIG area going back 15 years, but not for me- see the video.We have been shorting this successfully for over a year. Needs a big pullback to short. First place to consider is 1.2400.
Euro/Cad 1.4970 is where I will look to short again. Possible swing trade long at 1.4680- see the video.
Nzd: Worked last week for 170+ pip.s My bias is still to long. 0.7160 is now the area for me.
Nzd/Cad: Looking to short at 0.8860 not the strongest area but certainly worth watching it to slow down there on the 4 hour charts
Aud: Price did break higher, though I would have preferred a bigger one 🙁 – 0.7750 is the first place to watch for me.
Euro/Yen 130.40 is technically the spot to take a long.
Gbp/Yen. Not one of my pairs, 149.50… is the place to consider a long.
Euro/Nzd: same as last week “This one has more reasons for the stop so I will short if it pulls back to 1.6950″ – Intraday watch 1.6800 on smaller timeframes.
Euro/Cad: I will short once more, now at 1.4960 – If it moves higher I will look to short at 1.5200
Euro/Nzd: Looking to short at 1.6940- see the video
M3 Shorter timeframes
See the new course & recent blog posts as to how I do this: I do my analysis on daily and weekly charts first and make a note of the MAJOR areas of support and resistance. Then copy them on to Pierre’s Earth and sky template. Then I make a note of the weekly & monthly pivots points and add them to the charts. You will see lots of opportunities line up during the week. The important thing then is to select a bias for the next few days and do NOT take trades if the price is too near a trend line or pivot. Ideally, you want to buy when the price is near a major support and or pivot point line and has the potential to make at least 40 pips. Vice versa for a short.
New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
For more up to the minute, updates do not forget to drop by the forum.
Watch the video for more detailed explanations of this week’s analysis and trade plan.
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